Correlation Between H-FARM SPA and China Mobile
Can any of the company-specific risk be diversified away by investing in both H-FARM SPA and China Mobile at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining H-FARM SPA and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and China Life Insurance, you can compare the effects of market volatilities on H-FARM SPA and China Mobile and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in H-FARM SPA with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of H-FARM SPA and China Mobile.
Diversification Opportunities for H-FARM SPA and China Mobile
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between H-FARM and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance and H-FARM SPA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on H FARM SPA are associated (or correlated) with China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of H-FARM SPA i.e., H-FARM SPA and China Mobile go up and down completely randomly.
Pair Corralation between H-FARM SPA and China Mobile
Assuming the 90 days horizon H FARM SPA is expected to generate 7.95 times more return on investment than China Mobile. However, H-FARM SPA is 7.95 times more volatile than China Life Insurance. It trades about 0.1 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.21 per unit of risk. If you would invest 12.00 in H FARM SPA on October 22, 2024 and sell it today you would earn a total of 1.00 from holding H FARM SPA or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. China Life Insurance
Performance |
| Timeline |
| H FARM SPA |
| China Life Insurance |
H-FARM SPA and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H-FARM SPA and China Mobile
The main advantage of trading using opposite H-FARM SPA and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H-FARM SPA position performs unexpectedly, China Mobile can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Mobile will offset losses from the drop in China Mobile's long position.| H-FARM SPA vs. AGF Management Limited | H-FARM SPA vs. Platinum Investment Management | H-FARM SPA vs. Waste Management | H-FARM SPA vs. USWE SPORTS AB |
| China Mobile vs. Northern Data AG | China Mobile vs. NTT DATA | China Mobile vs. Advanced Medical Solutions | China Mobile vs. Teradata Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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